AN ADDRESS 


DELIVERED BY 


WILBUR S. TUPPER 


Vice-President 
Conservative Life Insurance Company 


BEFORE THE 


COMMERCIAL CLASSES 


OF THE 


UNIVERSITY OF MICHIGAN 


ANN ARBOR, NOVEMBER 13TH, 1902 


M'BRIDE PRESS LOS ANGELES 


NOTE: The following address ts 
reproduced from the “Insurance Indt- 
cator’’ of Detrozt, which journal first 
published it from stenographic notes 
taken by tts representative. 


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SOME PRIMARY PRINCIPLES 


OF 


LIFE INSURANCE 


a 


LADIES AND GENTLEMEN:—Before begin- 
ning the talk which I have in view, let me 
thank you first of all for the cordial reception 
which you have given me. It was not so 
many years ago, as it seems to me, and still 
it was twenty in reality, that I myself climbed 
the steps ofthe university to begin my course; 
and after passing through similar courses to 
those which some of you are now taking, I 
think I appreciate, more than I otherwise 
would, this reception and this opportunity of 
speaking to college students. 

From the earliest times, perhaps no one 
fact has impressed itself upon the minds of 
historians, poets and philosophers, as much as 
the uncertainty of human life. It has been 
the subject of song and story. Nothing in 
the world is so uncertain and indefinite as the 
after duration of any individual’s life. It 
may come through disease, it may come 
through accident; it may come in one of vary- 
ing forms, and it often comes unannounced 
and suddenly. 

While it is true that nothing is so uncer- 


5 


tain as the duration of individual life, it is 
also true that nothing is so absolutely certain 
as the duration of community life. What do 
I mean by community life? I mean that, if 
we take a group of individuals under the same 
conditions and ages, leading the same sort of 
life, we shall find that the after duration or 
average length of life will be relatively the 
same. Not only is this true of different local- 
ities, but it is almost absolutely true of differ- 
ent times. Thus the duration of human life 
today is about the same as it wasin_ the early 
times when the first mortality tables were 
formed. And in the main any differences 
that have been observed or recorded in this 
respect are due more to increased data ob- 
tained and greater facilities for obseryation, 
perhaps, than to any actual differences ‘which 
exist. 

Life insurance enables the individual 
whose life is uncertain and likely to be snuffed 
out at any moment to partake of the average 
longevity of the race. In other words, let us 
assume that there is one student here of the 
age of 30. He has an expectation of life of 
about 35 years. This assumes that he is the 
average in reality as well asin theory. Now, 
by means of life insurance, that life may be 
absolutely insured so far as the productive- 
ness of itis concerned. It may share in the 
average productiveness of life—an equivalent, 
in a monetary way, for living the average du- 
ration of life. 

Of the various mortality tables whieh have 
been prepared, I shall call your attention to 
two in common use in this country, and shall 
not go into details to any great extent in 
speaking of these. The first is the “Com- 
bined Experience” table of mortality, often 


6 


called the “Actuaries’.” This was derived 
mainly from the combined mortality experi- 
ence of some seventeen English companies; 
and the results graduated and carefully tabu- 
lated were thereafter used as a basis of life in- 
surance calculation and practice. The other 
in use in this country is the so-called ‘‘Amer- 
ican Experience” table. This was chiefly de- 
rived from the mortality statistics of one of 
the large American companies. But the 
Combined or Actuaries’ table was carefully 
used in grading this and was the general 
basis for the table. All of the life insurance 
companies in the United States, I believe, use 
one of these tables. 

In, your general studies upon this subject 
it will be of interest to you to look up the par- 


ticular statutes of your own state. Remem- 


ber that the mortality table and the rate of 
interest are matters which vary and which 
may be changed in different states. I believe 
that the standard of the State of Michigan at 


the present time is the American Experience 


with 4 per cent. interest. 

Let us say further that no one pretends 
that either of these tables is technically cor- 
rect; perhaps neither one is, nor is it neces- 
sary that it should be. They are both ap- 
proximately correct; and close enough to 
actual experience to enable any life insur- 
ance company to do business safely. 

An understanding of the elementary prin- 
ciples of the life insurance business—the cal- 
culation of premiums, etc., may be had with- 
out recourse to mathematics beyond that 
familiar to the ordinary high school student. 
We have to deal merely with the force of 
mortality and with interest calculations. I 
will show you in brief, in a simple way, how 


7 


to compute a premium to insure a life—let us 
say of the age of 30. Let us calculate the 
premium that willinsure $1,000 at the age of 
30 for one year, assuming the American ex- 
perience table and 4 per cent. interest. 

In the first place we have to consider not 
merely the force of mortality but also interest. 
The calculation of premiums in life insurance 
is upon the assumption that the premium is 
paid at the beginning of the year, and the 
benefit at the end of the year in which the life 
fails. ‘The average death would, of course, 
occur in the middle of the year. That would, 
according to exact calculations, give the com- 
pany six months to pay the average claim. 
Some time must be given to examine proofs 
of death and make any investigation neces- 
sary. Asa matter of fact, the practice is to 
pay death claims within 30 to 90 days after 
receipt of proofs; and some companies pay 
claims immediately upon receipt of satisfac- 
tory proofs of death. 

Now the first proposition is this: What 
is the present value of a dollar, at the rate 
assumed, due at the end ofa year? It may 
be represented by the fraction i0% or .9615, 
the amount that will at the same rate of inter- 
est produce $1.00 in two years is t0#xi0d, OF 
.9245. Similarly for other periods. 

We will start at the age of ten, taking 
100,000 people, and note the decrement by 
death at the end of each year. Now how 
many will be alive at the age of 30? The 
table says 85,441. Now how many of these 
will die between the age of 30 and 31, or dur- 
ing the year for which we are to insure this 
one life at the age 30? Can any one in the 
class give the answer? As a matter of fact 

20 


the table says 720. Now the fraction siz 
8 


represents the probability or the chance that 
a life of the age of 30 will fail during that 
year. Nowifwe multiply the probability of 
death during that year by the present value 
of a dollar due at the end of that year, we 
shall have a result something as follows— 
0081. In other words this .0081 will insure 
one dollar at the age of 30, to be paid in case 
the life fails during that year, the amount to 
be paid at the end of the year; and $8.10 will 
insure $1,000 at the beginning of the year at 
age 30, the amount to be paid in case of death 
at the end of the year. The figures given on 
the board insure the life for one year only. 
The cost of insurance, effected at age 30, to 
insure the life forage 31, is found by multi- 
plying the present value of one dollar due at 
the end of two years by a fraction whose num- 
erator is the number dying between ages 31 
and 32, and whose demoninator is the num- 
ber living atage 30. This amount paid atage 
30 suffices for the insurance for the year 31. 

In a similar way we may compute the cost 
of insuring at age 30, $1,000 for the ages 32, 
33, 34, etc., to the table limit. I should have 
explained earlier that we assume a limit to 
human life, at age 100 incase of the Actuaries’ 
table and at age 96 in case of the American 
table. We must arbitrarily cut the table off 
at some point. 

Having computed the cost of insuring a 
life at ages 30, 31, 32, etc., to the table limit, 
let us add these costs together. We shall 
then have a single net premium that will in- 
sure $1,000 at age 30, for the whole of life. 
You will notice I have said a single premium, 
and I have also called it a net premium. 

A single premium means that the whole 
cost is paid in one sum in advance. Now that 


9 


is not the way in which life insurance protec- 
tion is ordinarily obtained. Men do not effect 
purchases of life insurance as they buy. a suit 
of clothes. Whatis the process? Instead of 
paying a single premium in advance, the ap- 
plicant effects that which in reality is an ex- 
change or barter. It is inconvenient, some- 
times impossible, for the applicant to pay 
down the full price of protection. ‘The life in- 
surance company gives hima policy and he 
gives to the life insurance company, not the 
price of the insurance, but an annuity on his 
own life. Thus an exchange is made, and not 
a sale in the ordinary sense. 

Now to convert the single net premium 
paid in advance into an annual net premium, 
we may simply extend or change the single 
payment at the beginning of the term into an 
equivalent aunuity; into annual payments 
running through life or for twenty years or 
ten years as the case may be. ‘Then we have 
the premium in the form that it is usually 
applied. 

Let us assume that instead of selling a 
policy of life insurance, we want to sell a pure 
endowment of $t,ooo. I mean by this that . 
$1,000 will be paid, say to a man taking out 
the endowment at age 50, if he shall be alive 
20 years after. Nothing is to be paid in case 
of his death during the term. NowlI will use 
round numbers instead of using the technical 
figures of the table. We may gain in clear- 
ness what we losein exactness. ‘The princi- 
ple is the important thing. Roughly, at age 
50 about one-half will be alive at the end of 20 
years. We are now selling a pure endow- 
ment toaman atage 50, engaging to pay 
him $1,000 if he is alive 20 years from today. 
We are also selling 99 other men, age 50, 


Io 


pure endowments, each a like amount on like 
terms. Now if all these one hundred should 
live, we must manifestly have on hand at the 
end of the time $100,000. But in view of the 
fact that the table shows that only half of 
them will be alive, we shall need at the end of 
the term only $50,000. So if there were no 
such thing as interest in this calculation, we 
must observe the decrement by death during 
that period, and have on hand at the end of 
the period enough to pay each one alive at the 
end of the time. 

But there is the interest calculation. Let 
us assume the rate at 3%%. Now, how 
much of each dollar must we have on hand so 
that it will, by compound interest, in 20 years 
amount to a full dollar? We will say again, 
roughly, about 50 cents. If there were no 
interest we should need $500.00 to be paid in 
advance from each man. * In view of the fact 
that the present value of a dollar due at the 
end of twenty years is practically 50 cents, we 
must really have only $250.00 from each man, 
as the price of a pure endowment at age 50 to 
be paid 20 years after, if the purchaser is then 
alive. This is the single premium, paid in 
advance, to be changed into an annual pre- 
mium as before explained. 

Now that is a pure endowment, the pur- 
chaser getting nothing in case of death dur- 
ing the term and receiving the endowment 
only if he lives through the period fixed in 
the policy. Now, a life insurance endowment 
means $1,000.00 in case of death during the 
term, and $1,000.00 in case of survival to the 
end of the term. Howdo we get that ? 

Using the illustration already on the board, 
we will now find the cost of insurance, at any 
age, not for one year only, but successively for 


EL 


twenty years. In other words, the premium 
that will be sufficient on a basis of $1,000.00 
for all the deaths that occur during 20 years, 
according to the table rate. We will add to 
that premium the premium for pure endow- 
ment, at same age, as just explained, necessary 
to pay a like amount to those that survive to 
the end of the term. By putting the two 
together we provide for both those that live to 
the end of the term, and those that die prior 
thereto; and that is the method by which a 
regular life insurance endowment rate is calcu- 
lated. 

I have used the term net premium in these 
illustrations. I mean by that the exact insur- 
ance cost, assuming the mortality and interest 
rate to be exactly realized. We have as yet 
made no provision whatever for expenses of 
administration, emergencies, dividends, so- 
called, or anything of the kind. Now the 
‘gross,’ or “office”? premium is formed by 
adding a certain amount to the net premium, 
which is to cover expenses of management, 
etc. Now, in truth, this addition or “loading,” 
as itis called, varies with the custom of the 
company, the style of the policy, and the gen- 
eral conditions of the business. 

Insurance generally in this country is 
sold on what is known as the “participating”’ 
plan, with “dividends” or “profits.” Now, 
right here let me assure you that there is no 
such thing, according to the usual meaning 
of the term, as a dividend to the insured in 
life insurance. A dividend means profit. 
There is no profit in life insurance. Life 
insurance entails an absolute cost as does 
everything of value. This cost may be dis- 
guised or concealed in various ways. But it 
is there just the same. What are the so- 


1h? 


called dividends or profits of life insurance 
companies, as respects the policy-holder? 
They are really an abatement of the cost, the 
proper return of a proper overcharge, consid- 
ered necessary in the premises. In other 
words, we do not know in advance exactly 
what the mortality rate will be; we assume 
the tablerate. Now, our experience may, and 
ought to, through medical selection, bring the 
death rate below the table rate. Then there 
will be a saving in mortality, will there not? 
And that forms a part of the so-called dividend. 

Again companies assume a conservative 
rate of interest, say 3 or 3%%. Now,if they 
make more money on their investments there 
will be excess interest earnings. And that 
excess will contribute to the so-called dividend. 
This element may be considered a real earning 
or profit. 

Again there may be savings in the admin- 
istration of the business: this may also be 
added to the dividend account. ‘There may be 
other possible sources of dividends, so-called, 
but those outlined are the principal ones. 

Why should life insurance be effected in this 
way? If you should go to a tailor and ask 
the price of making a suit, he would not say, 
‘We will buy the cloth, figure out the cost of 
making, and other necessary expenses, and add 
them together; you pay so much down, and if 
there is anything left, after a fair profit, you 
will get it back.” We should consider such a 
tailor a fit subject for the insaneasylum. With 
most commodities —nearly everything—the 
exact cost of production can be ascertained and 
is clearly known before the saleis made. But 
the exact condition which shall exist during 
the running of a life insurance policy cannot 
be known inadvance. Hence we may properly 


13 


assume a rate which may be greater than is 
needed with proper return of what shall be 
saved out of the appropriation made. 

There is one company only in the United 
States that sells all its contracts on the non- 
participating basis, without any return of so- 
called profits or surplus. And another very 
great company in this country does nearly all 
of its business on this non-participating plan. 

Some one asks me here what is the 
amount or percentage added to the net pre- 
mium to 'make the gross or office premium. 
This is a hard question to answer, and one 
depending upon the company and kind of 
policy contract considered. Generally we 
may say that the non-participating policy is 
loaded from the very smallest per cent. up to 
about 15 per cent. For the participating rate 
the loading on various policies will run from 
15% up to say 40%, according to the kind and 
styleof policy. Much difference exists among 
companies not only as to the amount of load- 
ing but method of applying it. 

The two mortality tables referred to are 
sufficient to insure,as a rule, all of the adults 
in any city or state of this country without 
medical examination. Bear this in mind; it 
is an important principle and is often over- 
looked. Now you know that in order to get 
a policy you have to do something more than 
simply make application; you must be exam- 
ined by the company’s physician; a most rig- 
orous €xamination of your life is made—at 
some expense to the company, too. Why 
does the company do that, if these tables are 
sufficient to insure all adults living in Michi- 
gan without medical examination ? 

To explain, let us assume now that com- 
panies have no medical examinations at all; 


14 


who would apply for insurance? Not the 
men eligible for your foot ball team; not those 
who have every reason to expect to live long. 
No; those applying would be such as know or 
feel for some reason that life with them is to 
be short.. If companies had no medical ex- 
aminations, ouly the sick, only those certain 
soon to die, or fearing that they would soon 
die, would apply for insurance, and we would 
therefore not have anything like the average 
mortality rate asa result. 

So in the first place companies examine 
risks to guard against adverse selection. 
That which an individual chooses in respect 
to life insurance as favorable to himself, as 
between two courses of action or two options, 
—if it be favorable to him, conversely it must 
be adverse to the company. Therefore com- 
panies examine men in order to guard first, 
against this adverse selection, in order that 
they may not get all the bad risks in the com- 
munity, while the others are entirely indiffer- 
ent whether they insure their lives or not. 
Furthermore, examinations are made to bring 
about affirmatively as favorable a selection as 
possible. 

Again, 1f we could secure average lives ez 
bloc without the cost of medical examination, 
the results would be fully as favorable, from 
a practical financial standpoint, as they are by 
selecting risks, with the cost of medical exam- 
ination. To secure average lives ex bloc, is 
impracticable, therefore medical examination 
is not only desirable but absolutely necessary. 
I can illustrate adverse selection in another 
way. We have various kinds of policies; 
cheap term policies, ordinary life policies and 
endowment policies. Now in the practical 
operation of the company, in spite of medical 


15 


examination, we find a higher death-rate 
among those who apply for cheap term polt- 
cies. Why? Simply because those who are 
applying for low-priced term policies are do- 
ing it because they feel that there is some 
reason for thinking that they will die before 
the end of the term. On the other hand, 
those who are taking out high-priced endow- 
ment policies are better risks than the ordi- 
nary life insurers, simply because they feel 
pretty certain that they will live out the term 
of the policy and receive the endowment. 
Otherwise they would not have applied for the 
endowments. 

In connection with this topic, let me call 
your attention to a very important fact in 
regard to mortality among women. ‘The Brit- 
ish government has for many years sold an- 
nuities on the lives of men and women. 
Many years agoa number of Dutch investors 
made large investments by buying annuities 
on the lives of healthy young women. Long 
before the death of all of these, they had 
demonstrated that women live longer than 
men; that they are poorer risks for the 
grantor of the annuity; hence the Dutch in- 
vestors made a very large profit. Now this 
was about the beginning of an investigation 
in regard to mortality as between the sexes. 
And the finding of the Dutch investors has 
been repeatedly confirmed since; that, in adult 
life at least, women live longer than men. 
What was the result of this? Shortly after- 
wards a couple of companies organized in 
London for the special purpose of insuring the 
lives of women. ‘These two companies took 
women very readily and freely. Both these 
companies became bankrupt, because the mor- 
tality among women was so great! The 


16 


Dutch investors found that the women were 
better as annuitants and lived longer; and the 
two life insurance companies failed, because 
of the greater death-rate among women. Now 
that is one of the greatest apparent paradoxes 
that could possibly be observed. And from 
that day down to this some companies, and 
some American companies, too, have charged 
women more for annuities, because they are 
supposed to live longer, and more for life in- 
surance because they are supposed not to live 
so long. What resolutions do you think a 
woman’s rights organization would pass rela- 
tive to this? 

What is still more remarkable is the fact 
that both these courses were entirely logical. 
Why? On account of adverse selection again. 
They did not get a fair selection from these 
risks on women. Women were, and still are, 
occasional insurers, not average insurers. 
They are not hunted out by agents and fairly 
dragged by the neck into insuring their lives, 
asmmen are. Andin consequence such women 
as insure their lives are the occasional ones 
who seek insurance, or are willing listeners, 
because they know or feel that there is some 
reason why their lives should be protected. 
And therefore a higher death rate among 
female risks, as a whole, may be expected. 
Only when female risks are sought as vigor- 
ously as men are, can you get a mortality rate 
as favorable as on the lives of men. Another 
contributary cause to a higher death rate 
among female risks is woman’s traditional 
privilege of concealing anything about her past 
history or present condition. Fair examina- 
tions are not so easily obtained. 

Adverse selection will be felt when a policy- 
holder chooses an option. Assume thata man 


17 


insures at age 30, gets a 20-payment life 
policy of $1,000 and lives to be 50. Let us 
say that he has a reserve, or cash credit, of 
$500. Now at 50 the policy is fully paid up 
for life; he may take that and have no more to 
pay on it,or he may have his cash reserve, or 
credit, of $500. Hecannot have both. Now 
the death rate jumps up at this point and then 
slowly goes down again. Why? Because all 
those who feel that death is near are going to 
take the policy and let it run; while all those 
who are healthy and feel they are going tolive, 
will take the $500. Thus through adverse 
selection the poorer risks, asa rule, remain 
with the company. 

I see my time is going rapidly and I shall 
not have time to more than touch upon other 
interesting branches of the subject. Just a word 
as toinvestments. Inthe first place, you must 
bear this in mind: Make all of your investiga- 
tions in life insurance investments start with 
the statutes of the State. The life insurance 
corporation is a creature of the statute, and of 
course derives all its powers and privileges 
from the laws of the State. It must therefore 
make all its investments along certain lines 
which the statutes permit. 

From State supervision of investments 
there are good results and bad results. The 
good results are that a general rule of this kind 
will keep some companies, possibly, from stray- 
ing beyond bounds, and thus compel them to 
invest the people’s money more safely. ‘The 
bad results are that, as the rules must be gen- 
eral in their application, they restrict a com- 
pany from some profitable investments which 
otherwise probably might be made. Some 
statutory provisions in regard to investments 
are “survivals,” not adapted in all respects to 


18 


the changed conditions of the present time. 

Among investments generally permitted 
you will find United States bonds, the bonds 
of the state and the bonds of the municipal 
corporations of the state, and sometimes those 
of other states and municipalities. Likewise 
bonds of certain corporations under conditions 
specified in the statute. You will always find 
real estate mortgages, under certain condi- 
tions, generally that they must be first mort- 
gages on improved property, and for not ex- 
ceeding one-half the value of the property. 
See the statutes of Michigan for the require- 
ments in your own state. 

Now right here I want to call your atten- 
tion to what seems to me a singular fallacy or 
mistaken notion in regard to real estate mort- 
gages as lifeinsurance investments. The com- 
mon assumption is that no investment can be 
better fora life insurance company than mort- 
gages on real estate. You recall what I said 
about adverse selection in the matter of risks. 
Now let us see how adverse selection operates 
here. 

Let me represent this graphically on the 
blackboard as follows: Let the space between 
these two lines, say about a foot apart across 
the board, represent the value of mortgaged 
realestate. Draw a line halfway between these 
two lines, and let the space between this and 
the lower line represent the mortgage or the 
money loaned. Now these real estate mort- 
gages are in various parts of the country. In 
Detroit, in Minneapolis, in Omaha, in Denver, 
in Los Angeles. Inthe course of time there 
will come depressions in real estate in some 
places. There will be a wave of depression 
running along, striking the middle lines from 
above in some places. Now what is the result? 


19 


Wherever the actual value comes more than 
half way down, touches or goes below this 
middle line, the real estate becomes worth less 
than the mortgage,and the mortgagor is going 
to let it go, and the property goes to the com- 
pany. It will beto the interest of the mortga- 
gor to let it go. Hence the companies will 
gradually accumulate, never the best, but 
always the least desirable pieces of property. 

Again, when the company gets this mort- 
gaged real estate, itis usually, or should be, 
improved property; and this is a constant 
source of annoyance and expense. Wherever 
depreciation in values—as upon the collapse 
of a boom—has left property worth less than 
the mortgage, the company acquiring it must 
run a regular realestate and rental business in 
addition to the many cares of insurance busi- 
ness proper. ‘The foreclosed property requires 
improvements, repairs, and care generally. I 
believe I am safe in the assertion that as be- 
tween good bonds and real estate mortgages, 
generally, there should be a difference of one- 
half of 1% to make up for the adverse selec- 
tion which is sure to go on, as the company 
will inevitably acquire the most undesirable 
pieces of real estate. 

A company should be as free as possible 
to energize along lines of its own appropriate 
business,—which is the insuring of lives. 

Some companies, especially in earlier 
years, have been conspicuously successful 
with real estate investments. In general the 
worst feature today of many an excellent 
company’s statement is the item of depre- 
ciated and unproductive real estate, acquired 
under foreclosure. One company in particu- 
lar, scrupulously rigorous in what it deems 
correct insurance methods, has, through this 


20 


process of adverse selection, been compelled to 
own enough real estate in the Mississippi 
Valley to abundantly confirm this principle. 
And there are others. 

In respect to investments there are some 
differences to be observed between the older 
and larger companies and the younger and 
smaller ones. A very large company will 
have the advantage which goes with a large 
volume of money. It can take advantage of 
financial opportunities, and can measurably 
control, or at least affect, the market. The 
cumulative force of capital is in its favor. 
On the other hand, the young company will 
not have among its assets foreclosed mort- 
gages, unproductive real estate or depreciated 
bonds. Furthermore, the small company is 
able to invest its hundred thousands or its 
one million of income obviously more profit- 
ably than will be possible with an income of 
sixty millions, and generally can better per- 
sonally investigate securities. This whole 
subject of life insurance investments is a very 
interesting one, and one which J commend to 
you for further investigation. 

In the few minutes that remain I want to 
call your attention to a broader and deeper 
meaning of life insurance than is usually im- 
plied by that term. 

Life insurance rests on the same basis as 
fire insurance. While life is precious, viewed 
in the light of sentiment, it is the financial 
value of a life which is really insured. 
Human life is insured for the same reason 
as a building, and for that reason only. Now 
let me call your attention to a singular 
anomaly: Suppose that a building or furniture 
has been insured, and is by fire partly destroyed. 
That partial loss would be paid of course, be- 


21 


cause the insurance company insures for 
whatever loss may occur to the property by 
fire, within the amount of the policy and the 
value of the property. Now, remembering 
that it is the productive energy of human life 
that is insured, what shall we say of a partial 
loss of life through accident or disease? 

Insurance against accident and insurance 
against disease are well recognized branches 
of the business; but they have been hereto- 
fore looked upon as something distinct and 
apart from life insurance. As a matter of 
fact, they are both life wmsurance in the full 
sense of the term, as much as the insurance 
which protects your building against a partial 
loss ts fire insurance, equally with that which 
protects tt from a total loss. 

Life insurance policies are now being de- 
vised which shall protect life fully and com- 
pletely and pay the partial loss as well as the 
total loss of life. And in one contract, also. 
Those who need insurance most to protect 
their families in case of death, are generally 
those who can least afford the loss of the pro- 
ductive energy of life, when that loss is 
brought about by accident or disease. Insur- 
ance that protects life against a partial loss 
appeals strongly to the human mind and the 
human heart; because man is essentially sel- 
fish. Justly, on high moral grounds, insur- 
ance against the partial loss should appeal 
with great force, to the insurer who. is a pro- 
ducer or wage earner. If he does not protect 
himself and his own earning capacity, how 
can he hope to be able to pay a premium that 
shall protect his wife and children, should he 
for any reason lose that earning capacity ? 

I call this to your attention as one of the 
latest, and, to my mind, one of the greatest 


22 


developments of life insurance; a contract 
which protects the family of the insurer in 
case of death; which protects him in case his 
life suffers an infraction by sickness or by ac- 
cident. This is life insurance in its most 
complete and perfect form. 

Even as mortality tables have been pre- 
pared, indicating what the death rate is, asa 
basis for proper rates insuring against death, 
so do we have tables that indicate the cost of 
insurance against accident and insurance 
against disease, which are partial or tempo- 
rary losses of life. 

Now, in conclusion, as the hour closes, let 
me say that I have been able merely to call 
your attention to points in outline without 
stopping to develop them. I trust that this 
talk will add to your interest and lead you to 
study further this great subject which is such 
a mighty force today in the commercial and 
industrial world. 

Ladies and gentlemen, J thank you very 
much for your interest and your attention. 


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